The world's third-largest luxury group, Gucci, today reported a 97 per cent slide in first-quarter earnings as a strong euro and the SARS outbreak hit sales of smart bags, fashion goods and perfumes.
The Dutch-listed firm with Italian roots saw net income tumble to €1.2 million from €35.5 million in the first quarter of the previous financial year. Sector analysts had expected a 22 percent drop to €27.6 million.
"Simply stated it was the perfect storm: Everything that could have gone wrong did go wrong," chief executive Mr Domenico de Sole told CNBC, although he spoke of significant improvement in the past two months and said he was quite optimistic about 2004.
Gucci, which has American designer Tom Ford as creative director and counts Yves Saint Laurent, Stella McCartney and Alexander McQueen among its fashion brands, is majority-owned by French retailer Pinault-Printemps-Redoute (PPR).
On a divisional level, only the core Gucci operations turned in an operating profit, before goodwill and trademark amortisation, of €64.8 million. That was still down almost a third from 93.8 million the previous year.
But losses at Yves Saint Laurent widened and YSL Beaute made a loss against a small profit previously, while losses at other operations increased.